Key creditors of the Singapore-based crypto lender Hodlnaut Pte have rejected a proposed restructuring plan and instead want to liquidate the company, according to a Jan. 11 filing by Hodlnaut’s court-appointed interim judicial managers, Bloomberg reported.
The creditors believed their interests are best served by winding down the firm as soon as possible to "maximize the company’s remaining assets available for distribution," as stated by Algorand Foundation, one of the creditors.
Hodlnaut, which also has operations in Hong Kong, halted withdrawals in August 2020 and was granted protection from creditors.
Suffered Near $190M loss Due To Collapsed Terra Digital-Token Ecosystem
The firm had downplayed its exposure to crypto fugitive Do Kwon’s collapsed Terra digital-token ecosystem (CRYPTO: USTC), but in reality, it suffered a near $190 million loss.
This coupled with a number of cryptocurrency companies — such as Three Arrows Capital, Voyager, and Celsius Network — which imploded in last year’s digital-asset rout had led to the current state of the company.
Investigations By Singapore Police For Potential Cheating And Fraud
The group of creditors also objected to a provision in the restructuring plan that allowed the directors who presided over Hodlnaut’s collapse to continue managing the business.
This was because Singapore’s police force said in November it was investigating Hodlnaut and its directors for potential cheating and fraud.
The question mark over the suggested restructuring added to the uncertainty about the company’s future.
Furthermore, a hearing on Friday rejected an application to remove the interim judicial managers, adding to the confusion and lack of clarity about the company's next steps.
Benzinga has reached out to Hodlnaut for a comment.
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